Welcome to San Diego Blog | March 23, 2012
Why Buyers Should have their Own Agents
I received a call the other day from my brother asking if I would help him find a home in Orange County. Initially, he was concerned about burdening my time, but felt much better once I explained how I get paid. He was pleasantly surprised to learn that the seller of the home would pay my real estate fees.
As the buyer, he pays nothing additional for independent representation. Sellers pay a commission (which is negotiable, but typically around 6% of the sales price) to the listing broker, which is then shared with the broker who brings the buyer to the table. Experienced real estate agents are skilled professionals who are paid solely on commission, but they work long, hard hours to earn their fees. By offering a commission to the buyer’s agent, the seller generates interest among real estate professionals who will want to show the property to their clients, which ultimately benefits the seller.
The Benefits of Buyers’ Agents
As my brother’s agent, I am committed to helping him find the best possible property, analyzing property values, and assisting him in getting the property he chooses at a competitive price. A real estate agent has a fiduciary duty to represent the best interests of his or her client, and must exercise the utmost care, integrity, honesty and loyalty in all dealings with our clients.
Buyers’ agents are committed to protecting the buyer’s interests, and only the buyer’s interests, in a real estate transaction. Buyer’s agents work diligently finding properties that suit the client’s needs, desires and price range, highlighting the differences and similarities of properties, and providing detailed information so buyers can make informed decisions before making an offer.
Listing agents, on the other hand, represent sellers, and are ethically bound to put the seller’s best interests above all else. Their job is to market the property and do whatever is necessary, within ethical constraints, to obtain the highest possible price for their clients’ homes. Listing agents review and present offers to their clients, making recommendations while seeking the highest and best offer from a qualified buyer with sufficient funds to complete the transaction.
As a buyer, beware of listing agents who offer to represent both sides of the transaction. Buyers who go straight to listing agents are moving forward without effective representation. While it is legally possible for the listing agent to also represent the buyer, there is significant potential for a conflict of interest in this situation.
At best, the dual agent will favor neither side, and cannot give independent advice to either side on critical issues such as property value. A dual agent cannot negotiate on the buyer’s behalf. At worst, the listing agent might have a bias in favor of original client, the seller, which results in the buyer paying more for the property than they buyer would have paid with independent representation.
Buyers’ Agents Offer a Competitive Edge
Buyers’ agents work diligently supplying up-to-date sales data, presenting available properties, researching the competition and property history, and providing any other relevant information so buyers can formulate opinions and competitive offers. Buyers’ agents work endlessly negotiating sales prices and terms in an offer, and serve as advisors to their clients on other important matters in a purchase contract like timing (close of escrow date), earnest money deposit amounts, and contingency periods. Buyers’ agents facilitate the flow of information between buyer and seller’s agent, explain property disclosures, and have a clear understanding of buyers’ rights and protections.
Buyers’ agents advocate for their clients, and work diligently protecting their interests. In the business of real estate, it pays to have a buyer’s agent in your corner, working on your behalf. For more information, questions or comments, please call (619) 246-8400.